FISCAL YEAR 2017/18
Contents COMPLIMENTARY COPY
Message from the Minister 2 Message from the Chairperson 4 Board of Directors 6 Corporate structure of NEA 7 Deputy Managing Directors 8 Managing Director’s Report 9 Generation Directorate 19 Transmission Directorate 44 Distribution and Consumer Services Directorate 61 Planning, Monitoring and Information Technology Directorate 86 Engineering Services Directorate 93 Project Management Directorate 119 NEA’s Subsidiary & Associate Companies 128 Central Activities 149 Administration Directorate 155 Finance Directorate 158 Statistics & Schematics 170 Tariff Rates 176 Appendix 180-193 Maps 194-196
NEPAL ELECTRICITY AUTHORITY Head Offi ce: Durbar Marg, Kathmandu, Nepal Phone: +977-1-4153007/4153013, Fax: +977-1-4153009 Email: [email protected] Website: www.nea.org.np
Nepal Electricity Authority 1 A YEAR IN REVIEW FISCAL YEAR 2017/18
2 Nepal Electricity Authority FISCAL YEAR 2017/18
Nepal Electricity Authority 3 A YEAR IN REVIEW FISCAL YEAR 2017/18
4 Nepal Electricity Authority FISCAL YEAR 2017/18
Nepal Electricity Authority 5 A YEAR IN REVIEW FISCAL YEAR 2017/18 Board of Directors
Mr. Anup Kumar Upadhyay Secretary Ministry of Energy, Chairman
Shishir Kumar Dhungana Mr. Chandra Tandon Secretary Member Ministry of Finance, Revenue
Mr. Umesh Prasad Thani Mr. Bhakta Bahadur Pun Member Member
Mr. Chet Raj Joshi Mr. Kul Man Ghising Member Managing Director, NEA Member Secretary
6 Nepal Electricity Authority FISCAL YEAR 2017/18 Organization Structure NEPAL ELECTRICITYNEPAL AUTHORITY
Nepal Electricity Authority 7 A YEAR IN REVIEW FISCAL YEAR 2017/18 Deputy Managing Directors
Mr. Sunil Kumar Dhungel Mr. Rajeev Sharma Deputy Managing Director Deputy Managing Director Generation Directorate Engineering Services Directorate
Mr. Jagadishwar Man Singh Mr. Mohan Ratna Shakya Mr. Hitendra Dev Shakya Deputy Managing Director Deputy Managing Director Deputy Managing Director Planning, Monitoring & IT Directorate Budhigandaki Hydroelectric Project NEA Engineering Company
Mr. Anil Rajbhandari Mr. Lekha Nath Koirala Ms. Shanti Laxmi Shakya Deputy Managing Director Deputy Managing Director Deputy Managing Director NEA Subsidiary Company Finance Directorate Administration Directorate Monitoring Directorate
Mr. Hara Raj Neupane Mr. Braj Bhusan Chaudhary Mr. Manoj Silwal Deputy Managing Director Off. Deputy Managing Director Off. Deputy Managing Director Distribution and Consumer Transmission Directorate Project Management Directorate Services Directorate 8 Nepal Electricity Authority MANAGING DIRECTOR’S REPORT FISCAL YEAR 2017/18
MANAGING DIRECTOR’S REPORT
t is with great honor, privilege and a sense effi cient power in the days ahead. I would like of satisfaction that I bring to you the Annual to take this opportunity to emphasize that the Report of Nepal Electricity Authority (NEA) in intermittent power cuts is purely due to technical successfully completing thirty three years glitches that the system has to face from time to of service in generating, transmitting and time. It will take some time and investment to get Idistributing continuous power to its consumers. rid of such supply disturbances. The past year can be considered successful as The last year also saw injuries and deaths of the NEA achieved its primary goal of eradicating load employees of NEA while pursuing their duties and shedding from the entire country from 14th May, local individuals due to electrical related accidents. 2018 with the end to power cuts during peak I on behalf of the entire organization would like hours in the industrial sector too. to pay homage to the departed souls and assure rd Celebrating the 33 anniversary of NEA is an greater vigilance to minimize accidents. opportune moment to share our achievements in NEA is taking steps for automation of its systems, the past year as well as to assure our customers in keeping with the changing times. This has on meeting our commitments with better performances in the coming year. become necessary to meet the ever increasing demand. Some of the major plans that are in The aim of making NEA a profi t making the process are Implementation of Enterprise organization again was achieved in the fi scal Resource Planning (ERP) Management, year 2016/17 with a net profi t of NRs 1,512.22 Geographical Mapping System (GIS Mapping), million. This trend has continued into the year Preparation of Distribution System Master under review (2017/18) with a net profi t of NRs Plan, Smart Meter/Grid Tied Meter (Net Meter), 1,010.20 million (provisional). The continuous Substation Automation System etc. supply of energy and the strict measures taken to reduce energy theft have made a big impact in The performances and achievements of NEA in this endeavor. the past year, 2017/18, are briefed below: The past year has also seen the commissioning of Operational Performance the long awaited Chameliya Hydroelectric Project The number of consumers has been increasing in the far west. A couple of Transmission Line gradually. The total number of consumers projects and a few Substation projects were also increased from 3.26 million to 3.55 million completed in the last FY 2017/18. including community and bulk buyers during The level of public support that has been coming the year. As has been in the past, the domestic our way after the end to the decade long load consumer category with 3.33 million consumers shedding has been overwhelming. We look remained the largest category with 93.83% share forward for continued public support and commit of the entire electricity consumers. Domestic to ensure the supply of continued, reliable and and Industrial consumer category contributed
Nepal Electricity Authority 9 A YEAR IN REVIEW FISCAL YEAR 2017/18
43.50 % and 37.53 % to the gross electricity total eradication of load shedding during the year. sales revenue respectively. Rest of the consumer At the same time it has also helped a great deal category accounted for the remaining 18.72% of in saving valuable foreign currency reserve of the the gross sales revenue. The total population with country that was being used to import additional access to grid electricity has reached about 70% petrol/ diesel for the generators, batteries, from 65 % in the last fi scal year. invertors and solar panels used to counter the darkness during load shedding hours. NEA’s hydropower plants including small power stations generated a total of 2,308.37 GWh of NEA’s overall operating expenses including power electricity, against the generation of 2,305.17 purchase increased from NRs 45,572.09 million GWh in the last year. The generation within the in the FY 2016/17 to NRs 52,621.37 million in country has not been suffi cient in eradicating load FY 2017/18, an increase of 16.98 %. The main shedding; additional power had to be imported reasons behind this increase in the operational from India. The total energy imported from India cost are the increase in the power purchase cost was 2,581.80 GWh as compared to 2,175.04 and staff salary due to additional recruitment. GWh in the last year, an increase by 18.70%. The In the FY 2017/18 NEA had a total revenue of total power purchased from Independent Power NRs 60,480.67 million as against the operational Producers (IPPs) within Nepal was 2,167.76 GWh, expenses of NRs 52,621.37 million resulting in an increase by 21.97% from the last year’s fi gure an operational surplus of NRs 7,859.3 million as of 1,777.24 GWh. The total energy available in against NRs 6,717.77 in the FY 2016/17 NEA’s system increased by 12.79 % to 7,057.93 The cost for purchasing power has again been GWh over the previous year’s fi gure of 6,257.73 the largest component in the total operating GWh. Out of the total available energy, NEA’s own expenses in the year under review. NEA spent generation contributed 32.71% whereas those NRs 33,817.27 million in purchasing power from imported from India and local IPPs accounted for the various Independent Power Producers (IPPs) 36.58% and 30.71% respectively. and import from India. This is 55.91 % of the total A nationwide drive was launched to reduce system revenue generated. losses. This has shown positive results reducing Energy from purchased power amounted to 67.3 the system losses from 25.78 % to 22.9 % in FY % of the total available energy and NEA paid 2016/17 and to 20.45% in the year under review. 61.54 % of the net electricity sales revenue for The amount of loss that still persists is still not this purpose. The total cost of purchased power within acceptable limits and continued drive to increased by 19.36 % in the FY 2017/18 as minimize it is underway nationwide. compared to FY 2016/17 due to the increase in Financial Performance the volume of import and to some extent because of normal price escalation in power purchase. After many years of huge fi nancial losses, NEA managed to earn a net profi t of NRs 1,512.22 Other operating expenses for generation, royalty, million in the fi scal year 2016/17. The net profi t transmission, distribution and administration in in the last fi scal year 2017/18 is NRs 1,010.20 the last FY 2017/18 amounted to NRs 1,775.94 million (provisional). The total revenue generated million, NRs 1,351.55 million, NRs 1,998.93 from energy sales and other income in the year million, 7,828.68 million and NRs 1,717.41 million reached NRs 60,480.67 million as compared to respectively. NRs 51,703.11 million in the previous year. This Interest expense for the year 2017/18 has been is an increase of 16.98 % from the previous year. calculated as NRs 4,086.39 million as compared The growth in energy sales and subsequently the to NRs 3,546.15 million in the previous year increase in revenue should be attributed to the 2016/17.
10 Nepal Electricity Authority MANAGING DIRECTOR’S REPORT FISCAL YEAR 2017/18
The growth in revenue should also be attributed to generation by December, 2018. the increase in energy sales after the eradication The earthquake of April, 2015 caused maximum of load shedding and supply of continuous power damage in the under construction Trishuli 3A HEP. throughout the country. The construction works by the Contractors CGGC NEA estimated a provision of NRs 2,500 million and CWE restarted after nearly two years. The work towards the long term employee liabilities in progress in the last year has been satisfactory respect of gratuity, pension, medical facilities and and the commissioning date of the project, as accumulated leave facilities under employees’ scheduled last year, is still April, 2019. benefi t plan scheme. There are several transmission lines that Administrative Functions have been completed in the year under review NEA approved “Service Contract Procedure 2017/18. The total length of transmission line, 2074” and “Internship Procedure 2074” which above 132 kV, completed is 382 Ckt km. Similarly have enabled outsourcing of staffs for its better a total of 1190 MVA substation capacity has performance. Organization and Management been added to the system. There are numerous Reform Committee has been rigorously working transmission line projects under different phases on assessing organizational reform and staff of construction, some in the process of tendering requirements. NEA recruited 743 new staffs of and some in the Feasibility study stage. The line various levels in FY 2017/18, which has increased length of under construction transmission lines the total staff to 9125. under 132 kV, 220 kV and 400 kV levels are 1,427 Ckt. Km, 5,782 Ckt km and 740 Ckt km Ongoing Projects respectively. Similarly the capacity of substation The delays caused by the massive earthquake under construction under 132 kV, 220 kV and and the subsequent Terai Bandh have defi nitely 400 kV level are 1,292 MVA, 4,905 MVA and 945 postponed the completion date by halting the MVA respectively. progress in the under construction hydropower NEA Subsidiary Companies projects being undertaken by NEA. Though the regular construction work, after the earthquake, The successful implementation of Chilime re-started just over a year ago, the projects still Hydropower as a subsidiary company of NEA need some more time for completion. encouraged the development of more projects under the company mode to ensure early decision Chamelia HEP had been stuck for years as making as well as proper public participation for decisions were not timely taken to sort out the the timely completion of the projects. The projects various issues with the different contractors. transferred or in the process of being transferred One of the major achievements of the past year to company mode and the progresses achieved 2017/18 has been the completion of Chamelia. thus far are as follows; The project started generation from one unit on 12th January, 2018 and was formally inaugurated Chilime Hydropower Company Limited (CHCL): on 10th February, 2018 with generation from both CHCL was formed as a subsidiary of NEA and units. owns the Chilime HEP (20 MW). After the successful completion and operation of Chilime Kulekhani III HEP has not been completed even HEP, CHCL has moved ahead with the formation though nearly all of the civil works are complete of three subsidiary companies of its own, namely; and most of the electro-mechanical equipments Rashuwagadhi Hydropower Company Limited are already at site. As of July 2018 all of the (RGHCL) to develop Rashwagadhi HEP (111 MW), civil works except for some minor patches are Madhya Bhotekoshi Jalvidyut Company Limited complete and nearly 80% of the electromechanical (MBJCL) to develop Middle Bhotekoshi HEP (102 works are also complete. It is expected to start
Nepal Electricity Authority 11 A YEAR IN REVIEW FISCAL YEAR 2017/18
MW) and Sanjen Jalvidyut Company Limited to develop Upper Trishuli 3B HEP (37 MW) as a (SJCL) to develop Sanjen HEP (42.5 MW) and cascade of Upper Trishuli 3A. An EPC contract Upper Sanjen HEP (14.8 MW). All these projects was signed with Sichuan ANHE Hydraulic and are in different stages of construction. Hydroelectric Engineering Co. Ltd., China on 12th February, 2018 for Civil, Hydro-mechanical Similarly CHCL has invested and established and Electro-mechanical works. The scheduled Chilime Engineering and Services Company Ltd completion date of the project is March, 2021. (ChesCo) to provide consultancy services for the development of Hydropower projects. There are Raghuganga Hydropower Limited (RGHL): RGHL three different hydropower projects in different was established as a subsidiary company of NEA phases of study for future development. CHCL is to develop Rahughat Hydroelectric Project (40 also in the process of constructing a corporate MW). After terminating the main civil contractor offi ce building starting this fi scal year. and increasing the installed capacity to 40 MW, Contract Agreement, on EPC mode, for the Upper Tamakoshi Hydropower Limited (UTKHPL): construction of Civil and Hydro-mechanical The biggest project till date, Upper Tamakoshi works was signed on 21st November, 2017 HEP (456 MW) is being built in the company with Jaiprakash Associates Limited, India. The mode under UTKHPL utilizing domestic fi nancial Contractor was issued the “Notice to Proceed on resources. It is one of the national pride projects. 23rd May, 2018 after receiving the approval from Most of the civil works are complete and the the Exim Bank of India. The invitation for bids for project is expected to be commissioned in this FY the Electro-mechanical works was published with 2018/19. The PPA was signed on 29th December, the fi nal date of submission being 6th September, 2010. After completion of Upper Tamakoshi, 2018. WAPCOS Limited is the Consultant for the UTKHPL intends to develop the 22 MW Rolwaling Construction Management and Construction Khola HEP (RKHEP). A contract has been signed Supervision. between UTKHPL and NEA Engineering Company to prepare Detailed Engineering Design and Upper Arun Hydroelectric Ltd (UAHEL): UAHEL was Bidding Documents of RKHEP. formed as a subsidiary company of NEA for the development of Upper Arun Hydroelectric Project Tanahu Hydropower Limited: Tanahu Hydropower (725 MW) and Ikuwa Khola Hydroelectric Project Limited, established as a Subsidiary Company (30 MW). The Consultant for detailed Engineering of NEA to promote the storage type Tanahu Design and Preparation of Bidding Documents Hydropower Project (140 MW), aims to commence of Upper Arun (UAHEP) and Ikuwa Khola (IKHPP) the major construction activities by the end has submitted the Inception Report. The fi nal of October 2018. After evaluation of Bids and Detailed Engineering Design Report and Bidding subsequent approval from the respective co- Documents are expected by June 2020. Similarly fi nanciers, Letters of Acceptance have been issued the Consultant for Detailed Engineering Design, to substantially responsive and lowest evaluated Tender Document Preparation and Construction bidders for both major construction packages. The Supervision and Contract Management of Access pre-construction activities such as construction of Road construction will submit its fi nal reports by access road to dam and powerhouse sites, camp December, 2018. facilities and a new 33/11 kV sub-station for construction power supply are in the fi nal stage of Tamakoshi Jalvidyut Company Limited: Tamakoshi completion. The compensation distribution to the Jalvidyut Company Limited has been registered as affected people is also almost completed. a subsidiary Company of NEA for the development of Tamakoshi V HEP (95 MW). This is a cascade Trishuli Jal Vidhyut Company Limited (TJVCL): development of the under construction Upper This Company was established as a joint venture Tamakoshi HEP. Lahmeyer International GmbH of NEA and Nepal Telecom Company Limited,
12 Nepal Electricity Authority MANAGING DIRECTOR’S REPORT FISCAL YEAR 2017/18 is presently engaged in the Detailed Engineering Storage Hydropower Project (828 MW). This is Design and Tender Document preparation. a high head project with a gross head of more Approximately 150m of the total 170m test adit than 1,300 m with minimum resettlement issue. excavation is completed. The interconnection Geotechnical and topographical works have been system with Upper Tamakoshi tailrace is carried out in the last fi scal year. Hydrological already under construction using the Contractor data at the dam site as well as the tailrace site working for Upper Tamakoshi. EOI documents are being collected. EIA study is under way. for the main construction [Contract 1-Civil Tamor Power Company Limited (TPCL): TPCL and Hydro-mechanical works and Contract-2 has been formed for the development of Tamor Electro-mechanical works] are being prepared. Negotiation and correspondences with various Storage Hydroelectric Project (762 MW). Project National and International Financing Agencies for Development Department (PDD) carried out Project Financing are being carried out and the optimization study which shows the project to be project intends to fi nalize its funding soon. more attractive at higher FSL even with inundation of Kabeli -A (37.6 MW) and Lower Hewa (21.6 MW). Dudhkoshi Jalvidyut Company Limited: This On this basis, PDD is conducting the feasibility company, as a subsidiary of NEA, has been study with an installed capacity of 762 MW and established for the implementation of Dudhkoshi FSL of 550 masl. The EOI for shortlisting potential Storage HEP (600 MW). The Updated Feasibility consulting fi rms, for the Detail Engineering and Detail Design are being carried out by ELC Design of the project, are being evaluated. The Electroconsult S.p.A. (Italy) in association with preparation of RFP documents are in their fi nal NEWJEC Inc. (Japan) with the grant assistance stage. of Asian Development Bank under Project Preparatory Facility for Energy (PPFE). The overall Andhi Khola Power Company Limited: The objective of the Consulting Services is to prepare company has been formed to develop Andhi Khola the project for implementation. This study phase Storage Hydroelectric Project (180 MW). PDD is to be completed in 30 months. The construction is currently carrying out the Updated Feasibility of the project is expected to commence from the study. Field investigation and Survey works are third quarter of 2020. being carried out. EIA study is also under way. Modi Jalbidhyut Company: The Company has During the current fi scal year, EOI and RFP will been formed for the development in the company be called from International Consulting Firms for mode of two projects in cascade, Modi HEP Detail Engineering Design and Tender Document (42 MW) and Modi A HEP (18.2 MW) with the preparation. Major environmental impact is the combined conceived installed capacity of 60.2 relocation of 500 households and inundation of MW. The Detail Design work has been awarded headwork structure of 9.4 MW Andhikhola ROR to AF Consult-Switzerland Limited in association project owned by BPC. with ITECO Nepal Pvt. Ltd. and Total Management Chainpur Seti Hydroelectric Project (210 MW): Services Pvt. Ltd. The Consultant started the This project is currently being studied by PDD detailed design as per the TOR from April 29, as a PROR (six hour peaking) project located in 2018 with the total design period of 10 month. Bajhang district. Project design, cost estimate The construction will be through Single stage two and fi nancial analysis have been conducted. envelop system of bidding and will be developed The Detailed Design and Tender Document in the Company Model. The necessary land preparation is planned to be conducted by acquisition process has already been started. International Consultants, the EOI and RFP Utter Ganga Power company: This company has documents for same will be completed in the fi rst been formed for the development of Utter Ganga half of this fi scal year.
Nepal Electricity Authority 13 A YEAR IN REVIEW FISCAL YEAR 2017/18
NEA Engineering Company Limited (NEAEC): NEA three categories of Hydropower projects; viz Run has also formed the NEAEC to provide complete of River (ROR), Peaking Run of River (PROR) and engineering services solutions to the power Storage type projects. Foreign Direct Investment sector. NEA holds majority ownership (51 %), with has also been encouraged with the PPA signing remaining 49 % held by other companies. The of Upper Trishuli 1 HEP (216 MW) and Rasuwa- company intends to build national engineering Bhotekoshi HEP (120 MW). capability for large hydro-projects, extra high A total of 15 new projects developed by the voltage engineering and similar techno-intensive Independent Power Producers (IPPs) with a areas and provide a resource pool of competent combined installed capacity of 71.643 MW were man-power tor the private sector to draw upon. commissioned in the FY 2017/18. This has At present the company is undertaking studies at increased the total number of IPP owned projects different levels of fi ve hydropower projects. It has in operation to 75 with a combined installed also undertaken the construction supervision of capacity of 512.6954 MW. 400 kV Dhalkebar Substation. To pursue research oriented work it has signed MOUs with Tribhuvan A total of 107 projects to be developed by IPPs, and Kathmandu Universities. It has also entered with a combined installed capacity of 2,356.313 into MOUs with international companies to obtain MW are under construction after fi nancial closure. international expertise whenever required. Similarly, 74 IPP owned projects with a combined installed capacity of 1,658.817 MW are in the Power Transmission Company Nepal Limited various stages of development. (PTCN): It is a subsidiary company of NEA with the objective of developing high voltage transmission During the FY 2017/18, a total of 45 new PPAs interconnection system between Nepal and India were signed with a combined installed capacity for the mutual benefi t of both countries. Two joint of 1,102.909 MW. This has increased the total venture companies, one in India and other in number of PPA signed with the various IPPs to Nepal, were incorporated for the implementation 256 with the combined installed capacity of of 400 kV double circuit interconnection between 4,527.8254 MW. Muzaffarpur and Dhalkebar. PPAs with grid-tied solar power projects have also Nepal Power Trading Company Limited (NPTC): started at the new fl at rate approved by the NEA NPTC is established with the objective of carrying Board. out power trading function within and outside Power Trading with India the country. The company is in the initial stage of Power exchange with India improved meaningfully operation. This will be a vital institution in future in the last year. NEA was successful in holding operation. India-Nepal Power Exchange Committee (PEC) Similarly other subsidiary companies formed meeting with Central Electricity Authority and and in the initial stages of implementation are the State Power Utilities of India in New Delhi on Transformer Utpadan Company Limited and Tower August 8, 2017 after 2011. In the absence of PEC & Pole Utpadan Company Limited. meetings, NEA was bound to pay the energy tariff with 5.5 % escalation per annum at all voltage Private Sector Participation levels. The eleventh PEC meeting fi xed the tariff NEA has been facilitating the participation of at IRs. 5.55, 6.00 and 6.45 per kWh at 132 kV, the Private Sector in Hydropower through Power 33 kV and 11 kV voltage levels respectively which Purchase Agreements (PPA). NEA has been helped NEA improve its fi nancial performance making all efforts in promoting Private Sectors in the fi scal year 2017/18. The quantum of to support us fulfi lling the energy demand. NEA the corresponding energy import under this has fi xed posted rates for energy purchase from power exchange mode reached 1507.39 GWh
14 Nepal Electricity Authority MANAGING DIRECTOR’S REPORT FISCAL YEAR 2017/18 corresponding to NRs.13,190.98 million in total. Government of India. The commercial arrangement for drawing power of 50 MW from each of them Another notable activity in power trading was the through North Bihar Power Distribution Company signing of the Power Purchase Agreement on Limited was made under India-Nepal PEC. Further, 28th March, 2018 between NEA and NTPC Viduyt NEA proposed three new 132 kV transmission Vyapar Nigam (NVVN), the nodal agency of the lines to be built between Nepal and the Indian government of the India for dealing with power State of Uttar Pradesh for the additional power trading issues with Nepal. The quantum of power exchange between Nepal and India in future. agreed was up to 120 MW to be transmitted to Nepal through Dhalkebar - Mujaffarpur Maximum power import from India in peak hours Cross Board Transmission Line for the period reached 521 MW in April/May, 2018, whereas of 15 months effective from April 1, 2018 and the highest average power withdrawal recorded corresponding tariffs agreed were IRs. 3.98/KWh was 425 MW in January/February, 2018. The for the fi rst sixth months and IRs.4.18/KWh for total quantum of energy transaction with a rise the remaining nine months. The quantum of the of 18.7 % reached to 2,581.78 GWh including corresponding energy import under this power 70 million units under the Mahakali Treaty. This trading mode reached 883.49 GWh corresponding corresponded to a payment of NRs. 19,371.76 to NRs. 5,195.55 million in total. million in the fi scal year 2017/18 against NRs 16,051.31 million for 2,175.04 GWh in the year Nepal also imported power through Tanakpur 2016/17. at IRs. 3.44/KWh under the Power Purchase Agreement with PTC India Limited for some months Way Forward of the dry season as in the earlier fi scal years and The main objectives of NEA as an organization the quantum of the corresponding energy import is to satisfy its consumers with continuous, under this power trading mode reached 120.9 reliable and quality supply of electricity as well GWh corresponding to NRs. 652.73 million in total. as to maintain reasonable fi nancial returns to NEA has also been making efforts to augment sustain as a business entity and plan for its future the capacity of Tanakpur Substation from 50 MVA expansion. The end to the decade long load to 100 MVA to enable Nepal to exchange higher shedding through integrated resource planning quantum of power through this point in future. including imports and effi cient management has Considering the power surplus scenario in Nepal given hope of achieving the long standing goal of during the wet season and defi cit in dry season becoming self-reliant in electricity generation and for some years to come, NEA proposed energy supply. banking with India in light of the seasonal The eradication of load shedding has also improved differences of demand and supply of electricity in the fi nancial health of NEA substantially. This has Nepal as well as India. Preparation of a procedural shown that proper management of the available framework in this regard is in progress after NEA resources can help improve a company’s fi nancial recently gave a detailed deliberation on it with conditions. NEA has strategic plans to reduce the concerned Indian entities in New Delhi. This operation cost, increase generation, maximize issue has also been discussed in the last Joint sales with reduction in system loss and increase Steering Committee (JSC)/Joint Working Group additional income from mobilization of additional (JWG) meetings. resources. Proactive efforts will be made to adjust Two new 132 kV Transmission lines, Kataiya- electricity tariff to cover the cost of service. Kushaha II and Raxaul-Parwanipur, were Energy mix for Nepal’s nearly all ROR hydro based commissioned in the FY 2017/18 under the system has to be considered at least on the short grant assistance of Ministry of External Affairs, term basis, until suffi cient energy generating
Nepal Electricity Authority 15 A YEAR IN REVIEW FISCAL YEAR 2017/18 capacity is achieved to meet the all year demand. construction of a Transmission Line network. NEA Imports from India as well as domestic grid is developing a 400kV transmission line backbone connected solar generation have been considered. with support from the various donor agencies; The 25 MW grid connected solar farm under such as the World Bank, Asian Development construction in Devighat is a prime achievement Bank, European Union, Exim Banks of India and in this regard. Similarly PPAs for private solar China etc. Millenium Challenge Corporation (MCC) generation have also been initiated. funded by the US government has also initiated the development of 400 kV transmission line The completion of the Dhalkebar 220/132 kV in the central part of Nepal. Moreover, one 400 substation has given an additional 100 MW of kV cross border link with India from New Butwal import capacity. Similarly the completion of the (Nepal) to Gorakhpur (India) and one with China Kushaha-Kataiya second circuit and Raxaul- from Galchi (Nepal) to Kerung (China) have already Parwanipur 132 kV Transmission Line will also been initiated and are expected to be completed add another 100 MW import possibility. With the within the next fi ve years. More cross border lines completion of the above facilities, the importing are proposed with India to be initiated in the near capacity from India during the dry season will be future. more than 600 MW. Completion of Hydropower projects like Upper Tamakoshi and other IPP These interconnections will enhance power projects in the next year will see an addition of wheeling possibility across the border and promote more than 600 MW to the system. Similarly with energy banking and export/ import opportunity. the completion of under construction generation In line with Government Policy to make access and transmission projects, we can expect an of electricity to all within next fi ve years and to addition of more than 1200 MW to the system cater 10 thousand megawatts of power by next within the next 2-3 years. ten years, NEA has initiated distribution capacity NEA has already signed PPAs with IPPs for expansion in the rural areas and distribution more than 4500 MW. These are mostly ROR system upgrading in the industrial corridor in the type projects with a few exceptions. PPA for one Terai and the main cities including Kathmandu. storage type project was signed with Tanahu Without major augmentation and reinforcement Hydropower Company Limited. As a long term of Distribution network within the next few years, strategy to cater to the load demands at different the increase in demand with the increase in supply time of the day as well as during the different will not be met. Similarly for safety and reliability seasons, we are focusing on Peaking Run-of-River reasons as well as from the aesthetic point of (PROR) as well as Storage type projects to meet view, the main distribution lines of Kathmandu the generation mix defi ned in “National Energy are planned to have an underground system. Crisis Mitigation and Electricity Development NEA has started the procedure of adopting modern Decade Concept/Action Plan, 2072”. In this vein, digital technology into its system to enhance its we are developing Dudhkoshi (800 MW), Tamor operational effi ciency, reduce energy theft and (762 MW), Uttarganga (828 MW) and Andhikhola enable itself to serve its customers in a better (180 MW) storage type projects and Upper Arun way. The implementation of Smart Grid and Smart (725 MW) and Tamakoshi V (100 MW) PROR type Metering system will defi nitely increase effi ciency projects. To attract private investment in Storage and reduce losses. The integration of solar energy as well as PROR type projects, PPA rates for the into its grid system through net metering is also same were also fi xed. planned to be expanded. Solar PPA signing with Another important aspect that needs immediate the new revised rates have already started. The attention to ensure that the power generated from online centralized bill payment system has been the proposed plants be evacuated timely is the initiated and will be expanded to all the customers.
16 Nepal Electricity Authority MANAGING DIRECTOR’S REPORT FISCAL YEAR 2017/18
This will facilitate customers to pay their bills on companies of Chilime are commissioned. A time. situation will arise when the Integrated Nepal The demand side management with energy Power System will experience a wet season effi ciency program announced last year will be surplus and defi cit during the dry season. The idea NEA’s focus area in the years ahead. LED lamps, of energy banking, devised last year, may be the effi cient fans, capacitor banks etc are the major only possible mechanism to cater to this surplus/ energy effi ciency programs to be implemented to defi cit scenario. There are enough grounds to be reduce peak and energy demands of the system optimistic for energy banking mechanism with as a whole. neighboring states of India. Discussions on energy banking have been initiated in Joint Steering NEA will be looking for ways to increase its revenue Committee (JSC), Joint Working Group (JWG) and with the optimal use of its available resources. Steps PEC meetings. Another major focus in the future have been taken to lease out the communication will be on energy leveling by increasing domestic network of NEA, available all over the country, energy demand during off-peak hours. at reasonable prices. This can be an additional source of income. The communication system NEA has started the process of implementing can also be expanded to the ward level through the Enterprise Resource Planning (ERP) system our distribution infrastructure. NEA owns land at to enhance the effi ciency and management prime locations in the cities. There are plans for capability within the organization. A world class developing business complexes in selected areas ERP software designed to rapidly adjust to to augment its additional income sources. changes in technology and business to maximize enterprise agility is in the process of being NEA will have its corporate and system planning acquired. The ultimate target is to make the functions for its short term and long term organization digitized and paperless. strategic planning. NEA initiated the institutional reform and fi nancial restructuring process last NEA is planning to bring each and every generation, year. Financial Restructuring process should transmission and distribution related installation continue until the organization is fully sustainable into a GIS base map with the implementation in all respect. Engineering and Power Trading of Geographical Mapping System. Similarly a companies have already been established. The Distribution System Master Plan will help NEA bring Engineering Company has been fully functional reliable, affordable and sustainable electricity with quite a large work load. NEA has 48% share services to all households and businesses in in the government owned Grid Company. The the country. This will be achieved using the most seven autonomous regional distribution offi ces, appropriate, effi cient and least cost on or off-grid approved by NEA Board last year, should be technological solution to optimize allocation of established and made functional within this fi scal resources from the country’s perspective and will year. Once the distribution offi ces start functioning provide a detailed roadmap with strong consensus under the state governments, they can be used to from the different stakeholders, encompassing initiate a system of multiple traders of electricity the necessary regulatory, institutional, technical to facilitate the buyers to choose the cheapest and fi nancial arrangements. option. Modern trading platform will be developed NEA is underway to install Smart Meters to the for short term trading of electricity. Load dispatch end users to improve system management and center will be augmented to central and regional loss reduction. It will solve different meter-reading levels with modern operational facilities. related problems and facilitate Online Bill Payment The Power Trading system will have to be System through commercial banks. Substation redefi ned once projects like Upper Tamakoshi Automation System (SAS) is being implemented in and the projects being developed by subsidiary all projects under construction and those coming
Nepal Electricity Authority 17 A YEAR IN REVIEW FISCAL YEAR 2017/18 up in the future. The key benefi ts of implementing performance and achievements within the SAS are Substation control through Operator, framework of authorities and responsibilities Graphical presentation of safety procedures, envisaged in the NEA Act 2041. enhances information management, minimizes I would also like to thank the Government of outages, improves productivity, detects fault Nepal, Ministry of Energy, Water Resources and location-useful for distribution systems, security Irrigation, Ministry of Finance and other concerned control with multiple access levels etc. ministries of the GoN for their continued A large organization like NEA needs to focus support, encouragement and patronage in the on capacity building for effi cient operation and development of the energy sector. I sincerely implementation of its activities. Training for acknowledge the great concern shown by the all levels of staffs within the organization will parliamentary committees in our regular operation be conducted. The NEA Training Centre will be and development pursuits. developed as a Center of Excellence by developing I am also grateful to the donor communities, who internal resource pool as well as building ties with have always helped us in the past and are willing international training organizations to meet the to continue their involvement in the coming training requirements. days for us to achieve our goal of fulfi lling the The “White Paper 2074” recently issued by growing needs of energy. I sincerely appreciate Ministry of Energy, Water Resources and the banks, auditors, IPPs, suppliers and investors Irrigation (MOEWRI) has set up a roadmap for for bestowing faith on us and helping us move the next decade in the energy sector. NEA, as a forward. Government organization, has to play a vital role The role of the media in disseminating factual to execute the plans and programs set out in this reports about the organization to the general White Paper. public has been very encouraging. I look forward It is our fi rm belief that ensuring the best service for similar support in the days ahead. delivery and improving morale and fi nancial The entire staffs of NEA including the employee health of our organization will defi nitely improve unions deserve the high degree of appreciation our credibility and will open avenues for all round for their hard work, support and cooperation to development of the organization in a better way. the management for daily operation of activities Our every endeavor should be focused for better and in implementing the formulated policies. and effi cient NEA. Finally, I would like to express my sincere thanks Acknowledgements and appreciation to our valued customers and I on behalf of NEA would like to take this opportunity different professional organizations for bearing to acknowledge the contribution of everybody, with us at times of extreme diffi culties and boosting directly or indirectly, in the performance and our morale by recognizing our untiring efforts. I achievements of NEA. I would like to express my would like to assure our valued customers that sincere gratitude to the honorable Minister of every possible step will be taken to maintain a Energy, Water Resources and Irrigation for his continuous, reliable and safe power supply in the dynamic and proactive leadership in boosting coming days. the morale of team NEA and providing the right Thank You. direction to the organization. My sincere gratitude also goes to the Chairman and members of the NEA Board of Directors for their expert and valuable guidance in decision making and formulating policies for the overall organizational Kul Man Ghising Managing Director
18 Nepal Electricity Authority FISCAL YEAR 2017/18
GENERATION DIRECTORATE
Generation Directorate, headed by Deputy LGO&MD is responsible for six (6) hydropower Managing Director is responsible for construction and one(1) thermal plant above 30MW installed of 3 ongoing hydropower projects together with capacity owned by NEA. Similarly, MGO&MD is operation and maintenance of NEA owned 19 responsible for twelve (12) hydropower and one power stations totaling 666.70 MW. The main (1) diesel plant which are below 30MW installed objective of this directorate is to construct new capacity ownedby NEA. Improved operation and projects owned by NEA and smooth operation and maintenance practices have been instrumental to maintenance of existing power plants with optimal enhance generation and minimize load shedding use of resources. The directorate is supported in the last FY 2017/18. Some of them are- by four departments, namely Generation Kaligandaki ‘A’, Middle Marsyangdi and Development Department (GDD), Technical Marsyangdi hydropower plants were operated Support Department (TSD), Large Generation in their full capacity in peak time during dry Operation and Maintenance Department season using their pondage capacity. (LGO&MD), Medium Generation Operation and Maintenance Department (MGO&MD) Efforts were made to minimise the canal each headed by a Director. It is supported shutdown duration required by Indian by three divisions/sections namely, Finance, irrigation department for headworks and canal Administration and Monitoring and IT. At present, maintenance for Gandak hydropower station. this directorate is taking care of construction of Efforts were made to ensure maximum plant the following three hydropower projects. availability in all other times. This helped to improve voltage of that area and import Kulekhani III Hydroelectric Project (14MW) more power (upto 40 MW) from Balmikinagar- Chameliya Hydroelectric Project (30MW) Gandak 132 kV line for supply in the adjacent (Commissioned) areas.